In this issue: Canadian exports to China decline, China’s largest ports remain strong in performance rankings, turmoil continues in China’s pork industry, BRI and FYI Monitor

Not so steady trade and port performance 

The University of Alberta’s China Institute’s Q1 2022 analysis showed a sudden decline in Canadian exports to China, reversing a constant pattern of growth. Imports have remained steady. B.C. was the only western province without a significant export drop in 2021-22. Alberta exports fell 29.63 per cent, Saskatchewan dropped 37.48 per cent and Manitoba 45.63 per cent. Saskatchewan is the only western province that experienced a small decline in imports (-5.26 per cent) during that same period.

The 2021 Container Port Performance Index highlights the challenges the Ports of Vancouver, Los Angeles, Long Beach and those in other west coast locations faced over the past year. Of the 370 global ports, Vancouver fell 65 spots from 2020 to 368. Long Beach fell 28 spots to 369 while Los Angeles fell 33 spots to rank 370. China’s largest ports, Shanghai, Ningbo, and Guangzhou were all ranked in the top 10.

Live pigs for homebuyers as China’s pork turmoil continues

Bloomberg reports that China’s National Development and Reform Commission informed large pork suppliers they can’t restrict supply to push prices higher and they also can’t hold back stock in anticipation of higher prices. Producers are still stuck in a boom-and-bust cycle, another Bloomberg report says, and firms need to recoup their losses with China’s second largest breeder Zhengbang owing $81 million in overdue bills. For international exporters like Canada, China is expected to import 39 per cent less pork this year and Hong Kong 21 per cent less show the latest U.S. Department of Agriculture estimates.

China’s struggling housing market may be able to use some of the increased pork supply. Bloomberg reports that Chinese developers have resorted to alternative methods to sell property, such as giving buyers a live pig and accepting grain as a down payment.

Canada’s move into critical minerals

The Investing News Network reports that Canada has partnered with the U.S., Australia, Finland, France, Germany, Japan, Korea, Sweden, the U.K. and the European Commission to develop critical mineral supply chains. The partnership comes hot on the heels of a recent Canadian government shift, reported by the Globe and Mail, to reduce Chinese investments in Canada’s critical minerals industry.

Also, a Globe and Mail report says a U.S. cybersecurity firm alleges Chinese government involvement in social media disinformation campaigns targeting Canadian critical mineral companies. A series of tweets connected to the online network Dragonbridge, a front for the Chinese government, were aimed at Saskatchewan’s recent rare earth project successes to increase public disapproval of the project.

CWF’s Belt and Road and Five-Year Plan Monitor

Stay informed on recent Belt and Road Initiative and Five-Year Plan developments of relevance to Western Canada’s relationship with China.

A closer look at the B3W rebrand

Led by the United States, the G7 countries announced the Partnership for Global Infrastructure and Investment (PGII). The partners would provide $600 billion in infrastructure investments for low- and middle-income countries over the next five years.

According to China Daily, this plan is the rebranded version of the Build Back Better World (B3W) initiative which was announced in June 2021. As mentioned in a previous brief, B3W was meant to be the West’s alternative to China’s BRI. The initiative lagged for over a year after it was first announced and the EU announced its own program, the Global Gateway (see previous brief). Now the U.S. and EU seem aligned with PGII. The Silk Road Briefing says that the United States’ contribution commitment is $200 billion through grants, public financing and private capital while the EU will invest $300 million euros. Canada signed on to the communiqué and Global News reports that Prime Minister Justin Trudeau “urged private sector financing incentives” but Canada’s overall commitment is unknown.

According to the BBC, the PGII hopes to mobilize project funds in four areas: tackling climate change, improving global health, achieving gender equity and building digital infrastructure. Examples of the initial projects include a solar farm investment in Angola, a vaccine manufacturing facility in Senegal and a submarine telecommunications cable connecting Singapore to France via Egypt. The White House memo on PGII says projects will also include cybersecurity, labour and anti-corruption protections.

PGII challenges
  • PGII stakeholders hope to fund initiatives through private capital, which means convincing businesses to invest, while China’s BRI is primarily state-funded.
  • Morgan Stanley estimated that by 2027 China’s overall funding for BRI could reach $1.2 to 1.3 trillion, compared to PGII’s $600 billion investment over the next five years.
  • The National Post highlighted the uncertainty around Canada’s commitment. Stephen Smith, a public policy postdoctoral fellow at the University of Toronto, told the Post that if PGII was “too focused on ‘countering China’ it will be unsuccessful [because] Global South countries that are on the receiving end of this investment don’t care about U.S.-China competition, they don’t want to choose, they just want more investment.”
  • Shuvaloy Majumdar, a Munk senior fellow with the Macdonald-Laurier Institute, says in the same National Post article that PGII projects could come with conditions and paperwork which make the process “very bureaucratic and onerous and unattractive and [un]appealing to emerging economies who just want to build a road or a bridge.”

Other news

  • China’s Foreign Minister Wang Yi told Canada’s Foreign Minister Melanie Joly he “hopes ties with Canada can get back on track,” reports Reuters. The discussion came during an aside at G20 meetings in Bali with Joly reportedly speaking to Minister Yi about food security concerns and the Russia-Ukraine war.
  • CTV News asks the question “what’s the hold up?” as Canada has yet to replace former Canadian Ambassador to China Dominic Barton. Barton left the post in December 2021.
  • The United States is pressuring Canada and Mexico to do more to ban goods produced from Uyghur forced labour. The U.S. points to provision under the New NAFTA related to “the rejection of goods produced by slave labour,” reports the Globe and Mail.
  • As Shanghai reopened after COVID-19 lockdowns, BNN Bloomberg says that China’s trade surplus reached $98 billion in June, “the highest level in at least three decades.” Such growth isn’t expected to last because “the high growth rate likely reflected Shanghai’s reopening and a recovery in transport capacity.”

– Stephany Laverty, Taylor Blaisdell, policy analysts, and Connor Watrych, Jasleen Bahia policy interns

The China Brief is a compilation of stories and links related to China and its relationship with Canada’s West. The opinions expressed in the links are those of the articles’ authors and don’t necessarily reflect the views of the Canada West Foundation and our affiliates.